PROVINCE TO LAUNCH EQUALIZATION CHALLENGE IN COURT OF APPEAL

Government Relations Minister Harry Van Mulligen announced details today regarding Saskatchewan's challenge of the revised federal Equalization formula.

On behalf of Premier Lorne Calvert, who addressed the Senate Finance Committee in Ottawa today, Van Mulligen explained that the provincial government will be referring a number of specific questions to the Court of Appeal for its consideration.

"We do not believe Saskatchewan people are being treated equitably, nor do we believe that our ownership of our non-renewable resources is being acknowledged or respected," Van Mulligen said. "It is on those two principles - equitable treatment with other provinces, and ownership of resources - that we will turn to the Saskatchewan Court of Appeal."

The recent federal budget broke the federal Conservatives' promise to exclude non-renewable natural resource revenues from the Equalization formula. The new formula includes a cap that will, in effect, claw back Saskatchewan's non-renewable resource revenues.

"The effect of the cap is to deprive Saskatchewan people of the benefit of our own natural resources," Van Mulligen said. "We believe this is contrary to Section 109 of the Constitution Act, as well as the Natural Resources Transfer Agreement of 1930."

The Constitution Act of 1982 recognizes the principle of equalization as necessary for the federation. The Government of Saskatchewan believes the equalization formula must be fair and equitable, and that this formula is not.

Historically, references have been used in Canada to address significant disputes between the federal government and the provinces. Many major constitutional issues have been considered by the courts by means of references.

Saskatchewan has long called for fair treatment of its resource revenues, pointing to the fact that other provinces have been able to fully benefit from their non-renewable natural resources. Nova Scotia and Newfoundland and Labrador were able to achieve temporary exemptions of their oil and gas revenues from the Equalization formula with the Atlantic Accords. Only Saskatchewan people have been denied this benefit.

Van Mulligen emphasized that Saskatchewan's decision to pursue legal avenues came only after numerous unsuccessful attempts to engage the federal government in productive dialogue prior to and following the most recent federal budget.

"Saskatchewan has essentially been ignored and our citizens insulted by misleading claims from the Prime Minister, his finance minister and the 12 Conservative Members of Parliament from Saskatchewan," Van Mulligen said. "They have refused to admit to their broken promise and have continued to insist that Saskatchewan people should somehow be pleased to receive one-time equalization dollars and nothing in years to come.

"In the absence of any meaningful dialogue with this Prime Minister or his government, we are left with little choice but to speak to the courts."

Saskatchewan Justice expects to submit the questions and supporting materials to the Court of Appeal this fall.

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For more information, contact:

Mark Claxton
Government Relations
Regina
Phone: 306-787-6156
Email: mclaxton@gr.gov.sk.ca
Cell: 306-535-1307